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We’re not ‘going broke’

07/16/12 08:00 AMUpdated 09/06/13 07:02 AM

Sen. Rob Portman (R) of Ohio is getting plenty of attention lately, in large part because we know he’s being considered for the Republican vice presidential nomination. And given his notoriety, it was interesting to see Portman, George W. Bush’s former budget director, deliver his party’s weekly address over the weekend, arguing, “We need to face facts: we’re going broke.”

There was some irony in Portman’s complaint: the senator simultaneously complained about the deficit and the proposed tax increases on the wealthy that would reduce the deficit.*

But that’s not the interesting part. Rather, there are two broader angles to keep in mind here. The first is that Portman seems unnervingly confused about what “broke” means. We learned recently that global demand for U.S. Treasuries is so remarkably strong that investors will literally pay us to borrow their money.

Imagine a family household with a steady income, but high debts. If banks are tripping over one another, begging that family to borrow the banks’ money – charging negative interest rates – is that family broke? Of course not. But that’s the situation the United States is in. On the contrary, we have the world’s largest economy, we’re paying our bills, and it’s literally never been so easy for us to borrow as much as we want. Either Portman is ignorant about America’ finances or he’s trying to deceive the public.

But even if we put all of that aside, the other problem here is that Portman is focusing on the wrong problem: he sees the debt as the main issue, while unemployment is what really matters.

Indeed, none other than George W. Bush – Portman’s former boss – has a new book out this week, which argues, among other things, that prioritizing deficit reduction right now is a mistake. This week’s Republican address pushed a message that even Republicans don’t agree with.